Shares of McKesson Bottoming out?

Published on Tuesday, 13 December 2011 04:48 Written by Christian Paolinetti

New York, December 13th (TradersHuddle.com) - Shares of McKesson Corporation (NYSE:MCK) ended the trading session lower by $0.17 or -0.21% from its previous close. McKesson's price action in today's session formed what is considered to be a Hammer, where bears drove prices lower intraday. However, the strong finish indicates that bulls regained control forming a trend reversal.

McKesson Corporation (NYSE:MCK) distributes pharmaceuticals, medical-surgical supplies, and and health and beauty care products throughout North America. The Company also develops, implements, and supports software that facilitates the integration of data throughout the health enterprise.

McKesson's stock has been trading in a well defined range with support at $76.31 and resistance at $82.26, this range is also being used by traders to plan their positions.

Traders wanting to establish a position in McKesson or traders that are already holding the stock can use the hammer formation to their advantage, since the pattern signal a potential bullish trend reversal.

Hammers are important candlesticks as they mark bottoms and support levels. Further buying pressure, and preferably on expanding volume, is needed before acting, as heavy volume will serve to confirm the validity of the reversal.

In the case of McKesson, traders who want to add to their positions or start a new position, need to watch for confirmation of the reversal. Below a Hammer illustration: